Post written by:
Michael Foguth – President of Foguth Financial Group in Brighton, Mi, specializing in retirement planning.
It’s no secret that men and women are different, and money management is no exception. When it comes to finances, women generally earn less than men and often second guess their abilities. While men tend to analyze a document line by line, women often analyze the overall picture of what’s going on.
Regardless of how you analyze things, taking control of your finances and finding the confidence to create transformation isn’t just about moving money around or signing documents.
Women sometimes struggle to find the clarity and confidence they need to take action. They may feel overwhelmed by the volume of information and decisions to be made, or they could lack confidence in their knowledge. These internal “money blocks” can have a negative impact, but the blocks can be knocked down with a few changes to your approach.
Here are five ways women can gain financial empowerment and release the barriers that could be holding them back from gaining the power they deserve in their financial life.
1. Start prioritizing your own needs – not just the needs of others. The pressure of family responsibilities, whether it be caring for children or an elderly parent, often falls on women’s shoulders, and it’s easy to put the needs of others first. This holds true in financial scenarios as well. Try making a list of your financial goals, whether they be short term or long term, big-ticket or small item. Think about the reality of meeting those goals, and give them a priority number. It’s okay to add the needs of others to that list as well, but start with your own needs first.
2. Put an end to money secrecy. Money can be a taboo topic for many, and it’s easy to keep your money questions to yourself – for a myriad of reasons. In a recent survey of over 1,500 people conducted by Policygenius, 20% of participants reported that they managed their finances separate from their partner, while other large groups within the survey stated that they didn’t know anything about their partner’s retirement savings or if their partners had any debt. Staying silent about money can not only lead to relationship issues, but can also contribute to lower salaries in the workplace for women. It also feeds the myth that women aren’t as “good” at money as men. When discussing money, it’s a good idea to talk about earning money as much as you talk about spending it, and it’s ok to speak up and negotiate what you want in the workplace.
3. Be confident in the knowledge you already have. Studies show that women are quick to underrate their skills when it comes to finances. A recent study by George Washington University revealed that more than one-third of the gender gap in financial literacy can be attributed to confidence, instead of a true gap in knowledge. This confidence gap correlates to less stock market participation among women, among other financial options. In reality, studies show that women are better at saving and investing money than men. Knowledge of day-to-day expenses and finances is the building block for understanding more complex financial investment opportunities, and tapping into your foundation of knowledge will often lead to success in financial decision making.
4. Be more certain about your decisions. Feeling overwhelmed by your financial options is normal, and it can create a sense of uncertainty when it comes to making decisions. We may have a good idea of what we want right now, but it’s hard to envision ourselves as – let alone make decisions for – who we may be down the road. Allow time to get to know the person you want to be in retirement, and give yourself permission to make decisions for the person you want to be.
5. Seek out trustworthy financial advice. Research shows that getting professional advice is one of the smartest things you can do with your money. And it’s about more than your portfolio. A professional is there as your mentor, behavioral coach, and your accountability partner. Foguth Financial Group can answer your questions, talk about the decisions you’ll need to make, and help you walk away feeling smart, capable and empowered with your money and in control of your future in a supportive and judgment-free zone.